Vice Admiral Andreas Krause in the circle of soldiers

Vice Admiral Andreas Krause in the circle of soldiers

Under the German flag...?

3 Aug 2012 | Blog, Security policy | 9 comments

Actually, you have to be grateful for this farce:

The dispute over the planned reflagging of the cruise ship "Deutschland", which became known as the "Traumschiff", is escalating. [...] The captain and large parts of the crew are against the fact that the Malta flag is soon to fly on the last cruise ship to fly the German flag, according to the German newspaper "Bild". The shipping company, which has belonged to financial investor Aurelius since its insolvency, wants to save costs. [...] However, the ship will still fly the German flag at least during the Olympic Games in London. "It would have been embarrassing if Federal President Joachim Gauck had officially received German guests on the MS Deutschland under the Maltese flag"said State Secretary for Economic Affairs Hans-Joachim Otto to the "Bild" newspaper. [...]

Shipping company chases captain from board the "Traumschiff", Welt Online, 27 July 2012

So much for identity, this PR disaster could certainly have been avoided. The shipping company claims to have incurred operating losses of 1.5 million euros with the MS Deutschland in 2011 alone. In order to fulfil the losses of the ship itself and other obligations, it is not financially viable for the MS Deutschland to remain under the German flag, according to the shipping company. The shipping company has since changed its mind and the MS Deutschland will continue to fly the German flag.

Most German shipowners follow the reasoning of the Peter Deilmann shipping company. Flying the German flag is associated with comparatively high costs, which are particularly noticeable in the personnel area. Flagging out means that a shipping company can choose the country under whose economic and labour regulations it wishes to operate, irrespective of the nationality and location of the shipping company. As a result, Panama, for example, with a population of 3.5 million, has the largest merchant fleet in the world on paper with around 6,400 (2010).

The flagging out of German ships was already recognised as a problem ten years ago. In 2003, the German government launched an initiative aimed at increasing the proportion of around 4,000 German ships sailing under the German flag to 600. The shipowners' condition was to reduce costs and bureaucracy for their shipping companies. Since then, the federal government has subsidised the training and employment of German seafarers with around 50 million euros annually, this year it was even just under 60 million euros. However, not much has happened in the last 9 years and the target of 600 has certainly not been reached: around 490 ships are currently sailing under the German flag.

The PR disaster of Reedrei Peter Deilmann is one thing, maritime identity also takes place here, is even the unique selling point, because I can also do luxury hotel and shopping on land! Flagging out may bring the economic advantages described above, but with a purely emotional topic such as cruising, it is impossible to convey to passengers and the ZDF audience and would probably have sunk the "MS Deutschland" brand faster than any accident could have done.

It is also incomprehensible why the past federal governments have failed to take on the flagging out of German ships in a resilient manner. Germany claims to be a global leader in infrastructure and logistics, so it is a bad sign if German logistics companies at sea do not commit to this flag due to high costs and bureaucracy - national flagging is not a good thing. Corporate identity and economic credibility go hand in hand!

As I said, you actually have to be glad that this farce was able to push the issue of flagging out German ships into the media mainstream - but it has probably already exhausted its attention-grabbing potential.

9 Comments

  1. I find it astonishing how differently politicians decide on the deployment of the police on different occasions. While the deployment of police to protect vital German economic interests and - more importantly - the safety of seafarers on German ships is rejected, people insist that football stadiums can only be protected by the police. Shipowners are told that they should protect their own financial interests, while the police naturally take care of public spectacles in Germany. The two do not go together, but they have not yet been juxtaposed in the public debate. Perhaps this could be taken up again more intensively in this blog, says
    the sailor

    Reply
    • You are actually right. But then we need to discuss how and by what means we want to protect these interests in Germany and for German interests abroad. This is likely to be met with questioning eyes and rejection from the responsible Ministry of Economics in particular, as it does not see itself as a department with security policy interests. The BMWi also has no opinion of its own on the protection of Germany's global maritime trade interests and thus also the sea routes. At the BMI, the
      Incidentally, interests in police operations are also not on the same page (see the fight against piracy and the use of private security companies). How can we get both ministries to participate in this blog?

      Reply
  2. Flag management is not a German problem in either passenger or cargo shipping. Even Cunard's 'dream ships' do not sail under the English flag!
    The German government has made concessions to the shipping companies. Unfortunately, this was obviously not enough to overcome economic constraints (?). The question arises as to how far German social law and German safety standards would have to be conditioned in order to become competitive with the level of popular flag states? And wouldn't this provoke a wave of equality lawsuits in other economic sectors?
    I fear that the Deutschland will not be able to remain under the German flag in the long term either. Unless German passengers stand up for German standards - and are prepared to pay for them.

    Reply
  3. As far as I know, there was also a quid pro quo with regard to this assurance (tonnage tax and "Maritime Alliance"), which is now to be discontinued......... You are certainly not wrong that protection against piracy is only a secondary aspect. Nevertheless, giving up the monopoly on power bothers me. And I can't believe that the private VPD work like a security service. This analogy, which is often used as a justification, is not valid in my opinion. This is police work and not a doorman service.
    The keywords "cost reduction" and "pushing below German rates" sound like union diction at least. It may also be a matter of sheer economic survival. German seafarers are not easy to find, who wants to go to sea (as we in the navy are now realising very clearly). And if none can be found, the flag has to be removed, as otherwise legally compliant operation is simply not possible.
    You are of course absolutely right: there are at least two sides to the "flagging out" coin.

    Reply
  4. If the state were to fulfil its obligation to protect ships flying the German flag, there might be a little more interest from shipowners in a black, red and gold flag. But no, the monopoly on the use of force is not being exercised and it is left to security companies (whether dubious or not) to take over. The deployment of warships in the Horn of Africa is just one of many (necessary) measures and certainly not the most cost-effective. The fact that the state itself does not create the resources to have German-flagged ships protected by sovereign security forces (whether by the navy or federal police or even state police depending on the home port) is the real scandal.
    As a shipowner or other person responsible in the shipping industry, I would not be able to deliver performance without consideration. Apart from wanting to.......... Flagging out may therefore be an economic necessity.

    Reply
    • The issue of flagging out has little to do with piracy in the Horn of Africa. German shipowners have pledged to allow around 600 ships to sail under the German flag. The number is currently falling and has dropped below 300. This is about reducing costs and pushing personnel costs below the German rate (see MS Deutschland).
      Only two ships flying the German flag were affected by pirate attacks in 2010/11.
      Therefore: do not follow every clamour in the public and media landscape.

      Reply
  5. Debates about dream ships fall short. For the people of Hamburg, the dream ship is not MS Deutschland but Queen Mary 2. And you can hardly emphasise global trade interests with a "dream ship".
    Freight rates determine the profitability of merchant ships. If these collapse, the only solution is to try to turn the wage screw. This can be done by flagging out. On the mainland, this usually means relocating production to low-wage countries. This has more to do with understanding economics than understanding the sea.

    Reply
  6. Moi's question of how much national identity should cost is right to the point. The shipping company has simply not understood the media universe: You can flag out everything except the dreamboat! The answer to the above question is: you can flag out as much as public opinion allows. And this blog must contribute to strengthening maritime awareness (understanding the sea). We need more dreamboat debates!

    Reply
  7. "Stinginess is cool" ... this is especially true for service providers! Can you have anything against it? No. After all, it is the consumers who determine the price. Would German citizens want to pay more for a cruise just because a German flag is flying at the stern? Certainly not! So, who is surprised that a shipping company is trying to circumvent protection against dismissal, collectively agreed wages, works councils, maternity protection, 36-hour weeks, social security contributions, etc.? Perhaps someone can answer the question of what national identity should cost and who should pay for it?

    Reply

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